Analysis & Opinion

BRUSSELS (Reuters) - Russia warned on Thursday time was running out to conclude a missile defense deal with NATO after the two failed again to bridge differences on a project the alliance says is aimed at countering threats from states like Iran.

"We all agree it is important to keep on trying to keep on talking to keep on listening to each others concerns," he said. "If we can agree on this issue it will take our relationship to the next level," he added, saying NATO still hoped to reach an outline pact with Russia by a NATO summit in Chicago next May.

Lavrov said the two sides had had a "useful" discussion, but reiterated a demand for guarantees that the system did not target Russia given Moscow's concerns about the stationing of the shield's military infrastructure near Russian territory.

"We believe we still have some time to reach a mutually beneficial solution," he told a news conference. "We still have some time, but time is running out every day."

Both Rasmussen and Lavrov said the two sides had agreed to strengthen cooperation in other areas, including the fight against terrorism, and NATO ministers backed Russian proposals to boost cooperation in combating maritime piracy.

While Russia is interested in cooperating with NATO on missile defense, it is seeking legal guarantees that NATO's planned system is not aimed at limiting Russia's strategic nuclear capability and wants joint control of how it is used.

NATO wants separate systems and says Russia and NATO already have a binding agreement that they will refrain from the use of force against each other. Russia has threatened to deploy missiles and radar near NATO territory to counter the NATO system if an agreement to cooperate cannot be reached.

NO WORRY?

Lavrov repeated Russian concerns about plans to station elements of the missile defense system near Russia in NATO states Poland, Romania and Turkey, including radars which would have coverage into Russian territory.

"They keep repeating not to worry, not to worry, it is not targeted against you," Lavrov said. "If we are to be treated as a potential strategic partner, we'd like people to have respect for our intellectual abilities.

"We need legally binding arrangements because good intentions come and go, while military capability is what stays."

Last month Russian President Dmitry Medvedev said he would arm Russia with missiles capable of countering the U.S. shield and set up an early-warning radar system in its Baltic enclave of Kaliningrad, which borders Lithuania and Poland, in a bid to pressure the United States and NATO.

At the same time, Medvedev said NATO could use the radar station in Kaliningrad as part of a missile defense system if the two former Cold War foes agreed to cooperate.

On Wednesday Rasmussen dismissed the threat to deploy missiles near alliance territory as harking back to a "bygone era" and said that Moscow's recent rhetoric had not been in line with an improved mood seen at a NATO summit last year.

Analysts say Russia is overstating the threat from the shield to use the issue as a bargaining chip with the West. U.S. and NATO officials say recent anti-Western rhetoric has appeared aimed at a Russian domestic audience in an election period.

Russia's NATO envoy Dmitry Rogozin suggested Moscow could reduce its support for NATO's campaign in Afghanistan if it did not heed its warnings about missile defense. Rasmussen argued on Wednesday that security in Afghanistan was a shared interest.

Russia lets NATO transport supplies for Afghanistan move across its territory and the route has become vital since Pakistan barred ground resupply via its territory last month.